There is a clear need for improved bone grafting substitutes, in particular for large defects in which complete bridging is difficult to achieve. Current clinical therapies are hampered by limited availability of autograft tissue and inconsistent effectiveness of allogeneic approaches. It has become increasingly evident that vascularization of the regenerating tissue is a main hurdle, since large defects require a concomitant blood supply to achieve complete healing. A promising recent strategy is the co-transplantation of endothelial cells (EC) and mesenchymal stem cells (MSC) to promote both blood vessel and bone formation. This proposal combines this approach with an innovative biomaterials-based system to deliver both osteogenic and vasculogenic progenitor cells locally to large bone defects. We have developed a method to embed cells in protein-based microenvironments that provide the structure and support of a 3D extracellular matrix while also presenting instructive cues through cell-matrix interactions. Importantly, these modules are in the form of discrete microbeads (20050 ?m in diameter), which can be created and cultured separately, but can be combined and concentrated into a multi-component paste for direct delivery to bone defects, without the need to disrupt cell-matrix contacts. Our general hypothesis is that delivery of osteogenic and vasculogenic modules together as multiphase tissues will enhance in situ osteogenesis, due to paracrine interactions between the cells and their combined ability to generate vascularized bone tissue. The project has three Specific Aims. In SA1, we will create and characterize protein-based microbeads that separately promote osteogenic and vasculogenic functions of embedded cells, by systematically examining the cell and matrix compositions that are most conducive to the desired tissue-specific functions. In SA2, we will combine osteogenic and vasculogenic microbeads to create multiphase tissues and characterize tissue-specific functions in vitro, and will examine how the different module types interact in a high density culture system. In SA3, we will test our overall hypothesis and demonstrate enhanced bone formation capability of multiphase tissue constructs in vivo, using an established femoral defect model in the rat. Key endpoints include quantified measures of the rate and extent of biomechanically competent, vascularized and metabolically active bone. This project employs attractive features of modular tissue engineering and capitalizes on recent advances in our understanding of paracrine interactions between EC and MSC that are important in bone regeneration. It therefore has the potential to improve treatment of the most challenging orthopedic defects, and could have important impact on the clinical treatment of musculoskeletal injuries.